Economic Commentary [December 2020]

Black, James and Brocek, Frantisek and Cooper, Benjamin and Eiser, David and Kane, Kevin and McGeoch, Adam and McIntyre, Stuart and Spowage, Mairi, Fraser of Allander Institute (2020) Economic Commentary [December 2020]. Fraser of Allander Economic Commentary, 44 (4). ISSN 2046-5378

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Abstract

There is finally a light on the horizon, and many of us can now imagine a world without the restrictions we are operating under. While many parts of the world have re-entered lockdown – or have partially locked down – there is tentative hope for the year to come. As we speak, initial rollouts are beginning of vaccines that will aim to ensure that 2021 will be a better economic year for Scotland than 2020. Despite this welcome news, it will take some time for the country to get to a point where significant restrictions can be eased. This will continue to have a particular heavy toll on key sectors in our economy, such as tourism and hospitality. Moreover, the roll out of a sustained vaccination programme across the world will take many months, meaning that the global outlook – crucial for Scotland's exports and investment prospects – remains hugely challenging. As a result, the ongoing economic crisis remains severe: there is still a hard recovery to come. With unemployment soon to rise, and a renewed squeeze on wages across the public and private sector, it will feel like Scotland is in a recession for some time yet.

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